KR Choksey's research report on HDFC Life Insurance Company
The Gross Written Premium (GWP) for Q4FY22 stood at INR 1,42,897 Mn a strong growth of 11% YoY owing to a robust growth in the renewal premium which stood at 73,412 Mn (growth of 15.6% YoY). For the full year FY22, GWP grew 19.1% YoY at INR 4,59,628 Mn driven by both new business premium and renewal premium. The VNB for Q4FY22 stood at INR 9,000 Mn, an increase 15.1%/29.7% YoY/QoQ. New business margin (NBM) expanded by 237 bps YoY at 29.5% in Q4FY22. The value of new business increased to INR 26,800 Mn, registering a YoY growth of 22% in FY22. The NBM for FY22 stood at 27.5% vs 26.2% in FY21. The solvency as on March 31, 2022, stood at 176%, post the cash payout of INR 7,260 Mn to Exide Industries, as part-consideration for the acquisition of Exide Life.
We assign a 3.25x P/EV on FY24E EVPS of INR 227.0 and a VNB multiple of 26x to HDFC Life and revising the weighted average Target Price at INR 706 per share (previously INR 790 per share) (50:50 weights on the P/EV and appraisal value methodology), implying a 28.9% upside potential over CMP. We have maintained our 'BUY' rating on HDFC Life Insurance Co. Ltd.
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